Loading...
HomeMy WebLinkAboutRES 15-7007 (CUP 120 HERMOSA AVE)RESOLUTION NO. 15-7007 2 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HERMOSA BEACH, CALIFORNIA, SUSTAINING THE DECISION OF 3 THE PLANNING COMMISSION AND APPROVING A CONDITIONAL USE PERMIT AMENDMENT TO ALLOW FLOOR PLAN CHANGES AT 4 AN EXISTING BILLIARD HALL WITH FOOD SERVICE AND 5 OUTDOOR DINING TO CONVERT THE BUILDING TO A RESTAURANT WITH ON -SALE GENERAL ALCOHOL AND 6 OUTDOOR DINING (LAUREL TAVERN) AT 1220 HERMOSA AVENUE 7 IN THE CITY OF HERMOSA BEACH 8 SECTION 1. An application was filed by Michael Leko, 10 Riverside Drive LLC 9 requesting approval of Conditional Use Permit Amendment 15-7 to modify the floor plan at an 10 existing billiard hall with food service, on -sale general alcohol and outdoor dining; and facilitate a I 1 change in use to a restaurant with on -sale general alcohol and outdoor dining. 12 SECTION 2. The Planning Commission conducted a duly noticed public hearing to 13 consider the application on August 18, 2015, at which time testimony and evidence, both oral and 14 written, was presented to and considered by the Planning Commission. On October 13, 2015, the 15 City Council held a duly noticed public hearing to consider said Conditional Use Permit 16 Amendment, at which time testimony and evidence, both written and oral, was presented to and 17 considered by the Council. 18 SECTION 3. On September 8, 2015 the Applicant filed an appeal of the Planning 19 Commission's decision to limit indoor hours of operation to 12:00 a.m. (midnight) daily and limit 20 the outdoor patio to 11:00 p.m. daily, requesting consideration of 2:00 a.m. daily indoors and 21 12:00 a.m. (midnight) for the patio, and also requesting that a maximum of two (2) televisions be 22 allowed. 23 SECTION 4. Based on the Staff Report, testimony and evidence received, both written 24 and oral, and the record of decision of the Planning Commission, the City Council makes the 25 following factual findings: 26 1. The site is zoned C-2 Restricted Commercial and is located on Hermosa Avenue 27 within the downtown area. The existing building operates as a billiard hall with food service and �R Page 1 of 12 15-7007 1 2 3 4 5 6 7 s 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 ?R on -sale general alcohol until 2:00 a.m. daily and outdoor dining until 10:00 p.m. daily pursuant to Planning Commission Resolution 94-33. 2. The Applicant proposes to eliminate the pool tables and replace with table and booth seating, enlarge the outdoor dining area fronting Hermosa Avenue, enlarge the kitchen and back of house area and convert the existing billiard hall into a restaurant. The current occupant load of 157 will decrease as a result of the changes to the floor plan. 3. The parking lot will be altered to include an Americans with Disabilities Act (ADA) accessible space, which will eliminate one parking spot, and a bike rack capable of storing a minimum of ten (10) bicycles located at the front of the property. SECTION 5. The project is categorically exempt from the provisions of the California Environmental Quality Act (CEQA) per CEQA Guidelines, Section 15301(a), Existing Facilities, because the proposal involves interior modifications to an existing building. SECTION 6. Based on the foregoing the City Council makes the following findings regarding the Conditional Use Permit Amendment, pursuant to H.B.M.C. sections 17.40.020 and incorporating the conditions set forth in Section 17.40.080, finding that the use as conditioned will be compatible with the surroundings and all impacts can be reduced to an insignificant level: A. Distance from existing residential uses: The project is located on Hermosa Avenue, within the commercial center of the City. Surrounding properties exhibit general I commercial uses such as retail, services and restaurants while a legal nonconforming use is located to the rear of the property along Palm Drive. The topography of the site —steep from east to west —and the design of the building are such that access at the rear is not utilized. Business operations are oriented to the west towards Hermosa Avenue and are not anticipated to impact the residences to the rear. Conditions of approval prohibiting entertainment, music, speakers, televisions, or audio or visual media of any type, whether amplified or unamplified, from being located within the outdoor patio and requiring `No Loitering' signs to be posted in the parking lot are included to reduce possible impacts to neighboring residential uses. Page 2 of 12 15-7007 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 7R B. Adequacy of off-street parking facilities and streets, and distance of par from the proposed use: A parking plan from 1993 allowed for less than required parking at the billiard hall, a total of ten (10) parking spaces. The proposed improvements include elimination of one parking space due to the creation of an ADA compliant parking space (6 standard spaces, 2 compact spaces, 1 ADA space). The proposed change of use from a billiard hall/bar to a restaurant will decrease the parking demand from a code perspective. Additionally, the increase in the square feet of the back of house and reduction of the square feet of the seating area reduce the likelihood demand will be impacted. Furthermore, the project location within the downtown area makes it more likely trips to the business will be part of a multiple -destination trip to the City. Additionally, in order to encourage alternative modes of transportation a bicycle rack capable of storing a minimum of ten (10) bicycles will be installed at the front of the parking lot. Given the change in use from a billiard hall/bar to a restaurant, the reduction seating area and the business location within the downtown area on -site parking will not be I impacted. The existing Parking Plan resolution (P.C. Resolution 93-68) will be rescinded and all conditions from the 1993 Parking Plan are incorporated into the Resolution. C. Location of and distance to churches, schools, hospitals and playgrounds: The project site is located on Hermosa Avenue in the downtown core of the City. The proposed modifications involve the conversion of a commercial space to a similar use as the previous use. As such staff does not anticipate impacts to Valley View School, the Communi Center, or other parks or similar uses in the City. D. The combination of uses proposed, concentration and number of similar establishments or uses within close proximity to the proposed establishment: The downtown area contains a high concentration of late -night alcohol serving establishments open after 11:00 p.m. The property will operate from 8:00 a.m. to 12:00 a.m. (midnight) daily, as opposed to closing at 2:00 a.m. currently, while the outdoor seating area will close at 11:00 p.m. nightly pursuant to the CUP, as opposed to 10:00 p.m. currently. The proposed modifications to the floor plan facilitate a Page 3 of 12 15-7007 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 ?R change in use from a billiard hall to a restaurant, a less intensive use. As such no impacts anticipated. The City's late -night ordinance in Section 17.40.080(B) provides one method for evaluating whether the proposal would contribute to adverse impacts. While the outdoor dining patio is not proposed to be open after 11:00 p.m., the remainder of the business would continue to be open until 12:00 a.m. (midnight) daily. Section 17.40.080 provides specific criteria for consideration when determining whether to amend a Conditional Use Permit for a late -night establishment (see Attachment 3): i. Whether the total number of late -night alcohol beverage establishments will exceed the City's limit on such establishment: The proposed project involves an existing late - night alcohol serving establishment. An increase in alcohol serving establishments will not occur. ii. Whether the use will intensify through increases in the assigned occupant load from owner/operator-initiated construction andlor remodeling that expand the square footage or alter the floor plan: The occupant load will not increase. According to a table on page A-2.0 of the submitted plans and a review by the Building & Safety Department, the occupant load is shown to decrease from the existing 157 to approximately 117. A condition of approval requiring formal analysis of the occupant load by the Building & Safety Department and Fire Department prior to a Certificate of Occupancy being issued has been included in the Resolution to ensure the occupant load does not increase. iii. Whether proposed modifications to floor plans, conditions of approval, type of alcoholic beverages served (beer and wine versus full alcohol service), or other factors may increase adverse impacts: The existing on -sale general alcohol service within the building and in the outdoor seating area would remain the same. Hours of operation will be from 8:00 a.m. to 12:00 a.m. daily on the inside of the building and 8:00 a.m. to 11:00 p.m. daily for the outdoor dining area, with the windows closed at 10:00 p.m. The proposed floor plan changes will enlarge the kitchen and back of house facilities while also reducing the square feet of the seating area, thereby facilitating the change Page 4 of 12 15-7007 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 ?R use from a billiard hall/bar to a restaurant. No additional square footage is proposed. No impacts are anticipated. iv. Whether the type, quantity, or geographic location of the establishment will create an over -abundance of similar establishments in a particular area of the City such thal it will reduce the diversity of businesses operating in the immediate area: The proposed project involves an existing billiard hall/bar with on -sale general alcohol being converted to a restaurant and will not alter existing concentrations of on -sale establishments. E. Precautions taken by the owner or operator of the proposed establishment to assure compatibility of the use with surrounding uses: Plastic windows will be closed at 10:00 p.m. on the outdoor patio and entertainment, music, speakers, television, and audio or visual of any type will not be allowed on the outdoor patio. F. Noise, odor, dust and/or vibration that may be generated by the proposed use: A condition of approval prohibiting televisions and other similar equipment from being located on the outdoor patio and signs posted in the parking lot prohibiting loitering have been included in the Resolution as well as a condition limiting televisions in the interior dining area to a maximum of two (2). Odor, dust and/or vibration disturbances are not anticipated. G. Impact of the proposed use to the City's infrastructure, and/or service: The proposed project involves conversion of an existing billiard hall/bar to a restaurant. Existing infrastructure and utilities for the site are anticipated to be adequate; however, the Building Division indicates the property will be required to show that waste disposal systems are adequate for operation of a bona fide restaurant. The project has been conditioned to ensure waste disposal facilities are adequate prior to occupancy. H. Other considerations that, in the judgment of the Planning Commission, are necessary to assure compatibility with the surrounding uses, and the City as a whole: Preliminary review of plans by the Fire Department and Building Division indicates a new occupant load and exiting plan will need to be submitted. The applicant has been working with the Page 5 of 12 15-7007 1 2 3 4 5 6 7 s 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 7R Building Division to meet these requirements and the project has been conditioned to ensure occupant load does not increase. SECTION 6. Based on the foregoing, the City Council denies the appeal and sustains the Planning Commission's decision for a Conditional Use Permit Amendment subject to the following Conditions of Approval: 1. The use consisting of a restaurant with on -sale general alcohol and outdoor dining shall be consistent with plans submitted and approved by the City Council on October 13, 2015. Minor modifications to the plan shall be reviewed and may be approved by the Community Development Director. Any substantial deviation must be reviewed and approved by the Planning Commission. 2. The Applicant's existing right to operate until 2:00 a.m, is hereby (subject to the reservation set forth below) and the permitted hours of operation for the interior dining areas shall not extend beyond the hours between 8:00 a.m. to 12:00 a.m. (midnight) daily. The City may, however, upon application from the Applicant filed after one full year of operation, partially restore the Applicant's late night hours, but only up 1:00 a.m. at the latest. The provisions of HBMC Section 17.40.080.B will not apply to such application. The application for a request to reinstate hours until 1:00 a.m. may be approved provided that substantial evidence in the record demonstrates that the business is operating as a bona fide restaurant during all of the hours that it is open to the public, is operating in full compliance with all conditions of approval, is not causing any adverse impacts, and is otherwise operating in conformance with all applicable laws. 3. The permitted hours of operation for the outdoor dining area shall not exceed 8:00 a.m. to 11:00 p.m. daily, after which the area shall be secured and loitering shall not be permitted. a. Entertainment, music, speakers, televisions, or audio or visual media of any type, whether amplified or unamplified, shall be prohibited within the outdoor patio. 4. A maximum of two (2) televisions are allowed in the interior dining area. dining area. 5. A minimum 42" high railing shall be installed and maintained around the outdoor Page 6 of 12 15-7007 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 ?R 6. The business shall be operated as a bona fide restaurant. The restaurant must make available to customers and serve prepared food items of their choice until sixty (60) minutes to the close of business. 7. The restaurant shall maintain sales reports showing the actual items sold and price charged and invoices for all food, nonalcoholic beverages and alcohol beverages sold for the prior twelve (12) months. Should the Planning Commission or City Council initiate a CUP modification or revocation proceeding, the Commission, or the Council, may at its discretion require the subject business to provide (a) a statement of the percentage of gross sales, computed monthly, that resulted from the sale of prepared food for not longer than the prior twelve (12) months; and (b) the supporting data upon which the percentage is based. The Planning Commission, or City Council, may also require an audit of the records of the business by a certified public accountant to determine the gross sales of food and alcohol or a forensic audit by a qualified auditor selected by the City of the information and data systems by which the information is produced. The results f these audits may be used to determine whether the grounds for modification or revocation exist. When considering revocation or modification, a restaurant that sells or provides on - sale alcoholic beverages will be presumed to be operating as a restaurant if the restaurant maintains a minimum of fifty (50) percent of the total gross sales, computed monthly, from the sale of prepared food is presumed to be a restaurant. An on -sale restaurant that does not meet these percentages has the burden of demonstrating that it operates as a restaurant, as that term is defined in the municipal code. Refusal to provide the information requested under this subsection within J sixty (60) days shall be deemed prima facie evidence that the business is not operating as I restaurant. 8. Live entertainment (including amplified music, disc jockeys, live music whether acoustic or amplified, and live performances of all kinds) per Section 17.04.050, ("Entertainment, Live") and customer dancing, are prohibited. 9. The provision of alcoholic beverages shall comply with the following: a. All alcoholic beverages shall be served in nondisposable drink ware. Page 7 of 12 15-7007 t 2 3 4 5 6 7 s 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 ?R b. Signs shall be posted in a conspicuous location warning patrons of illegality of removing alcoholic beverages from the restaurant, and carrying and consuming alcoholic beverages in any public place such as the public sidewalk or beach. 10. The proposed modifications and any future owner initiated alterations cannot intensify the use or increase the occupant load. Maximum permissible occupancy must be clearly posted at all times and may not be exceeded at any time. If the Police and/or Fire Depart determine that the maximum permissible occupancy of the building is being violated, they cite the business and initiate a Conditional Use Permit review. 11. The establishment shall not adversely affect the welfare of the residents, commercial establishments nearby. 12. The business shall prevent loitering, unruliness and boisterous activities of the patrons outside the business or in the immediate area. 13. `No Loitering' signs shall be posted in the parking area. 14. The Police Chief may determine that a continuing police problem exists, and may, subject to the review of the Planning Commission, direct the presence of a police approved doorman and/or security personnel to eliminate the problem. If the problem persists the Chief then shall submit a report to the Planning Commission, which will automatically initiate a review of this Conditional Use Permit by the Commission. 15. Any changes to the interior layout which alter the primary function of the business shall be subject to review and approval by the Planning Commission. 16. The exterior of the premises shall be maintained in a neat and clean manner, and maintained free of graffiti at all times. 17. To reduce marine debris associated with take-out containers, the establi shall not use take-out containers with a "No. 6" recycle code. 18. The business shall comply in all other respects with Municipal Code Chapter 8.24 (Noise Control) and noise from the premises shall not constitute a public nuisance. Page 8of12 15-7007 1 2 3 4 5 6 7 s 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 ?R a. Doors and windows on the interior and exterior dining areas, incl temporary style drop down windows/weather screening on the outdoor dining area, must be at 10:00 p.m. daily. 19. The practice of washing and rinsing restaurant floor mats, equipment, tables, etc., or discharge of any liquids, other than stormwater, onto the public right -or way, into the parking lot drain or stormdrains, is strictly prohibited. Discharge of liquids or wash water shall be limited to the sanitary sewer. 20. A manager who is aware of the conditions of this Conditional Use Permit shall be on the premises during business hours. The Conditional Use Permit shall be maintained on the premises in a location where employees can easily read the conditions. 21. The restaurant with on -sale alcoholic beverage service may be subject to periodic review process established by the City to verify conformance with the Conditions Approval. 22. The parking lot shall provide a minimum of nine (9) parking spaces at all times. a. The parking lot shall be designed and striped according to the plans submitted to the City Council at the public hearing on October 13, 2015. Minor alterations to the layout that do not affect the number of spaces may be approved by the Community Development Director. b. The parking lot shall be fully available for employee and patron parking during all hours of operation and back of house functions. Employees shall be encouraged to utilize the parking lot. c. Parking shall be free for employees and patrons of the business at all times. d. Signs approved by the Community Development Director shall be prominently displayed informing patrons that they may utilize the tandem spaces and the availability of a free valet service. A valet parking attendant shall be present at all times during hours of operation. e. A bicycle rack capable of storing 10 bicycles shall be provided at the front of. the site in a visible location and maintained at all times. Page 9 of 12 15-7007 1 2 3 4 5 6 7 a 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 7R f. A minimum three (3) foot wide strip of landscaping, with a minimum six (6) inch curbing shall be provided along the front of the parking lot (except for the entry drive). Landscaping must be non-invasive and an irrigation system shall be provided and shown on construction plans. 23. Exterior and interior water use shall comply with Municipal Code Chapter 8.56. 24. This approval incorporates conditions from and supersedes Planning Commission Resolution 94-33, which hereafter shall be of no further force and effect. 25. The improvements and the operation shall comply with all requirements of Building, Fire and Public Works Departments. a. The applicant shall submit a plan for occupant load calculation prior issuance of the Certificate of Final Occupancy. 26. The project shall maintain in conformance with all other applicable City of Hermosa Beach and regulatory agency requirements and standards, including but not limited to: California Department of Alcoholic Beverage Control, Los Angeles County Health Department, California Disabled Access Standards (Government Code Title 24), and Los Angeles County National Pollutant Discharge Elimination System Permit (NPDES). 27. The subject property shall be developed, maintained and operated in full compliance with the conditions of this grant and any law, statute, ordinance or other regulation hereafter adopted that is applicable to any development or activity on the subject property. Failure of the permittee to cease any development or activity not in full compliance shall be a violation of these conditions. 28. The Planning Commission may review this Conditional Use Permit and amend the subject conditions or impose any new conditions if deemed necessary to mitigate detrimental effects on the neighborhood resulting from the subject use. 29. Approval of this Permit shall expire twenty-four (24) months from the date (if' approval by the City Council, unless significant construction or improvements or the use authorized hereby has commenced. One or more extensions of time may be requested. No Page 10 of 12 15-7007 1 2 3 4 5 6 7 s 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 �R extension shall be considered unless requested, in writing to the Community Development Director including the reason therefore, at least sixty (60) days prior to the expiration date. No additional notice of expiration will be provided. SECTION 7. This grant shall not be effective for any purposes until the permittee and the owners of the property involved have filed at the office of the Planning Division of the Community Development Department their affidavits stating that they are aware of, and agree to accept, all the conditions of this grant. The Conditional Use Permit Amendment shall be recorded, and proof of recordation shall be submitted to the Community Development Department prior to the issuance of a building permit. Each of the above conditions is separately enforced, and if one of the conditions approval is found to be invalid by a court of law, all the other conditions shall remain valid ; enforceable. To the extent permitted by law, Permittee shall defend, indemnify and hold harmless City of Hermosa Beach, its City Council, its officers, employees and agents (the "indemnified parties") from and against any claim, action, or proceeding brought by a third party against the indemnified parties and the applicant to attack, set aside, or void any permit or approval for this project authorized by the City, including (without limitation) reimbursing the City its actual attorney's fees and costs in defense of the litigation. The City may, in its sole discretion, elect to defend any such action with attorneys of its choice. The Permittee shall reimburse the City for any court and attorney's fees which the City may be required to pay as a result of any claim or action brought against the City because of this grant. Although the permittee is the real party in interest in an action, the City may, at its sole discretion, participate at its own expense in the defense of the action, but such participation shall not relieve the permittee of any obligation under this condition. Page 11 of 12 15-7007 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 IR SECTION 8. Pursuant to the Code of Civil Procedure Section 1094.6, any legal challenge to the decision of the City Council must be made within ninety (90) days after the final decision by the City Council. SECTION 9. This Resolution shall take effect immediately upon its passage and adoption. The City Clerk shall certify to the passage and adoption of this Resolution, shall enter the same in the book of original Resolutions of said city; and shall make a minute of the passage and adoption thereof in the records of the proceedings of the City Council at which the same is passed anc adopted. PASSED, APPROVED AND ADOPTED this 10th day of November, 2015. ATTEST: City Clerk of the ffity Council G� AYOR of the City of Hermosa Beach, California Page 12 of 12 15-7007 STATE OF CALIFORNIA COUNTY OF LOS ANGELES CITY OF HERMOSA BEACH I, Elaine Doerfling, City Clerk of the City of Hermosa Beach, California, do hereby certify that the foregoing Resolution No. 15-7007 was duly and regularly passed, approved and adopted by the City Council of the City of Hermosa Beach at a Regular Meeting of said Council at the regular place thereof on November 10, 2015. The vote was as follows: AYES: DiVirgilio, Fangary, Tucker, Mayor Petty NOES: None ABSTAIN: None ABSENT: None Dated November 11, 2015 Elaine Doerfling, City Attachment 3 17.40.080 On sale alcohol beverage establishment. Revised 4/15. A. General provisions. The following minimum conditions and standards, in addition to any other deemed necessary or appropriate to ensure compatibility with existing or future permitted uses in the vicinity, may be required: 1. The establishment shall not adversely affect the welfare of the residents, and/or commercial establishments nearby. 2. The business shall prevent loitering, unruliness and boisterous activities of the patrons outside the business or in the immediate area. 3. The Police Chief may determine that a continuing police problem exists and may, subject to appeal to the Planning Commission, direct the presence of a police approved doorman and/or security personnel to eliminate the problem. An appeal to the Planning Commission shall be heard within sixty (60) days of filing the appeal. The Police Chief's determination will not be stayed during the pendency of the appeal. If the problem persists, the Police Chief then shall submit a report to the Planning Commission, which will automatically initiate a review of the conditional use permit. 4. The exterior of the premises shall be maintained in a neat and clean manner, and maintained free of graffiti at all times. 5. Any changes to the interior or exterior layout which alter the primary function of the business shall be subject to review and approval by the Planning Commission. B. Late -night alcohol beverage establishments. The following shall also apply to "late -night alcohol beverage establishments." Late -night alcohol beverage establishments means on -sale establishments that have been granted a conditional use permit that allows the establishment to operate after 11:00 p.m., including restaurants, establishments that serve or allow alcoholic beverages as the primary use (e.g., bars), and establishments that provide live entertainment. 1.Objective. The objective of this Subsection B is to reduce the potential for adverse impacts associated with late -night alcohol beverage establishments through the following means: a. To limit the total number of late -night alcohol beverage establishments that operate in the City, and to prevent an increase in the cumulative number of hours that these establishments operate after 11:00 p.m. b. To prevent the expansion and intensification of late -night alcohol beverage establishments through increases in an establishment's assigned occupant load as a result of increases to square footage or floor plan alterations. c. To prevent changes to floor plans, operating rights, type of alcoholic beverages served (beer and wine versus full alcohol service), or other factors that may result in adverse impacts. d. To encourage the voluntary reduction in permitted operating hours in exchange for other operational incentives, provided that the incentives do not exacerbate the adverse impacts sought to be reduced. e. To limit new late -night alcohol beverage establishments and encourage a diverse commercial sector in the City with a full -range of services for both residents and visitors that is compatible with the surrounding area. 2. Criteria. The following additional criteria shall be considered for any conditional use permit (new or amended) for a late -night alcohol beverage establishment: a. Whether the total number of late -night alcohol beverage establishments will exceed the City's limit on such establishments. The limit shall be set by City Council Resolution and may, upon recommendation by the Planning Commission or its own motion, be amended by the City Council from time to time. b. Whether the use will intensify through increases in the assigned occupant load from owner/operator- initiated construction and/or remodeling that expand the square footage or alter the floor plan. Assigned occupant load is calculated by the City under the relevant provisions of the Building Code. c. Whether proposed modifications to floor plans, conditions of approval, type of alcoholic beverages served (beer and wine versus full alcohol service), or other factors may increase adverse impacts. d. Whether the type, quantity, or geographic location of the establishment will create an over- abundance of similar establishments in a particular area of the City such that it will reduce the diversity of businesses operating in the immediate area. e. Notwithstanding the criteria in (a) through (d), whether exceptional opportunities exist to achieve other Community Development goals that will benefit the community, such as redevelopment of an underutilized parcel or older building; to promote or catalyze economic activity (e.g., new large or mixed use development); or to recognize the unique attributes of a new business. 3. Incentives. Holders of conditional use permits that request incentives in exchange for the voluntary reduction in permitted operating hours are eligible for incentives as follows. a. The planning commission, or city council on appeal, may grant one or more incentives in exchange for the voluntary reduction in permitted operating hours through an amendment to the conditional use permit. Incentives may include benefits such as: i. Modified operating rights (e.g., live entertainment, space for dance floors, changes from beer and wine service to general alcohol, etc.); ii. Modifications to conditions in the use permit; iii. Deviations from any required minimum food -to -alcohol ratio; or iv. Deviations from other standards in the code. Deviations from parking requirements or parking - related fees shall not be granted. b. In granting incentives, the planning commission, or city council on appeal, shall find that the incentive does not exacerbate the adverse impacts sought to be reduced by the reduction in hours, and may impose conditions to ensure that the incentives granted will be implemented consistent with the objectives of this subsection. c. City processing fees associated with such negotiations (e.g., conditional use permit amendment) may be rebated and/or reduced at the discretion of the city council. C. Restaurants with On -Sale Alcoholic Beverages. Any "restaurant" as that term is defined in Section17.04.050 that sells, serves or allows on -sale alcohol beverages shall comply with the following: 1. If open after 11:00 p.m., the restaurant shall make available to customers and serve prepared food items of their choice until sixty (60) minutes prior to the close of business. 2. The restaurant shall maintain sales reports showing the actual items sold and price charged and invoices for all food, nonalcoholic beverages and alcohol beverages sold for the prior twelve (12) months. Should the planning commission or city council initiate a CUP modification or revocation proceeding under Section 17.70.010, the commission, or the council, may at its discretion require the subject business to provide (a) a statement of the percentage of gross sales, computed monthly, that resulted from the sale of prepared food for not longer than the prior twelve (12) months; and (b) the supporting data upon which the percentage is based. The planning commission, or city council, may also require an audit of the records of the business by a certified public accountant to determine the gross sales of food and alcohol or a forensic audit by a qualified auditor selected by the city of the information and data systems by which the information is produced. The results of these audits may be used to determine whether the grounds for modification or revocation exist. When considering revocation or modification under Section17.70.010(H), a restaurant that sells or provides on -sale alcoholic beverages will be presumed to be operating as a restaurant if the monthly food to alcohol sale ratios are consistent with the ratios in Section 17.70.010(H). (Ord. 15-1350 §2, 2015; Ord. 12-1337 §1, 2012; Ord. 95-1130 § 7 (part), 1995: prior code Appx. A, §10-7)